The Honourable Â Â Â Minister of State for Finance, Mr. Remi Babalola, on Thursday advised the three tiers of government to look inwards to generate sustainable resources to meet the minimum requirements and needs of their economies, particularly the infrastructural development. He gave the advice in Ibadan, Oyo State at the 2009 Ibadan Week Conference organised by the Jericho Businessmen Club at the Banquet Hall of Premier Hotel.
The minister, who was represented by his Special Assistant, Mr. Bode Agunbiade, advised theÂ tiers of government not to solely depend on the monthly allocations from the FederationÂ Account. Delivering a paper on the theme of the Conference â€œInfrastructural Development ofÂ Ibadanlandâ€, Babalola explained that the provisions of infrastructure require furtherÂ increase in government spending, especially in these modern times.
He said, â€œNo doubt, with high expectations from Nigerians, the institutions of governmentÂ are constantly under pressure to deliver increased, as well as, improved services, and ofÂ course, the â€˜national cakeâ€™ has to be fragmented among the many units. With suchÂ fragmentation, no unit gets fully satisfied at the end of the day.Â â€œThere is therefore theÂ necessity of looking inwards by States and Local Governments to generate sustainableÂ resources to meet the minimum requirements and needs of their economies, besides the regularÂ allocations from the Federation Account.â€ The minister, who chairs the Federation AccountÂ Allocation Committee (FAAC), asserted that Nigeriaâ€™s oil revenue could not meet all theÂ numerous needs of the Nation.
Besides, he noted that the fluctuations in the international oil market and the OPECÂ production levels in recent times have continued to create enormous volatility in governmentÂ revenue projections, thereby truncating development plans and projects.Â Â â€œThe negativeÂ impact of â€˜boom _ burst cycleâ€™ of oil prices can only be addressed by enhancing theÂ internally generated revenue (IGR) profile of all tiers of governments in order to sustainÂ and deepen our development process.
â€œCurrently, all tiers of government spend far more than they earn. Unfortunately, the chunkÂ of the earnings goes for overheads and personnel costs, with very little left for capitalÂ projects, especially infrastructural development.
â€œSince 1999, both the States and Local Governments have received from the Federation AccountÂ huge amounts of allocation running into several trillions of naira, besides internallyÂ generated revenue. Yet the state of infrastructural development has remained, in comparison,Â very poor.
â€œOver the years, we have treated infrastructural investments as being exclusively theÂ responsibility of the public domain. But there is an increasing trend worldwide, wherebyÂ publicly provided infrastructure investments and infrastructure facilities are becomingÂ privatized. Indeed, over the last fifteen years, governments around the world pursuedÂ policies to involve the private sector in the delivery and financing of infrastructureÂ services.â€ He identified Private Sector Partnership (PPP) as the best option of addressingÂ the countryâ€™s infrastructural gap. PPP is an arrangement whereby the private sector suppliesÂ infrastructure assets and service that traditionally have been provided by the government.
It entails a formal collaboration between a public organization, such as the FederalÂ Government or a Sub_national authority, and one or more private companies generally with theÂ objective of procuring capital, management, technology and other resources as a means ofÂ enhancing infrastructure service delivery.
Babalola added, â€œMany countries (both developed and developing) have adopted the PPP schemesÂ in addressing their infrastructural challenges, and our various governments must be desirousÂ of attracting and partnering with the private sector in infrastructure development.Â Â â€œIndeed, the issue of whether to increase private participation in infrastructuralÂ development remains a live policy issue in many African countries including Nigeria. PPPÂ schemes, including concessioning, would no doubt, supplement scarce public resources, createÂ more competitive environment and help improve efficiencies and reduce costs.â€